All of B.C. relies on resource sectors

Heather Oland, Special to The Sun04.18.2013

Geologists and other experts search for base metals in northwestern B.C. Mining firms make a significant contribution to the B.C. economy. In the northern part of the province, mining exploration expenditures have increased by an annual average of 26.4 per cent over the past five years and are up 67.8 per cent between 2011 and 2012 for a total expenditure of $557.8 million last year. Photo courtesy of Roca Mines.

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The economic growth that is being experienced in Prince George is not only reflected in the northern city’s very low unemployment rate, but also in the city’s steadily increasing housing starts, housing prices, units sold, building permits issued and air traffic volume.

It is being driven by the $70 billion in resource and resource related projects planned and underway in northern B.C. over the next decade.

The resource-driven growth also strengthens the city’s fully diversified economy, everything from restaurants to retail to professional services. The growth in Prince George and northern B.C. is also being felt in Vancouver’s economy, as they are inextricably dependent on one another.

The mining sector is a good example of the symbiotic relationship between Vancouver and Prince George as mining is one of the critical drivers of the prosperity of the British Columbian economy.

According to the Mining Association of B.C., the gross revenues generated by the B.C. mining industry in 2011 amounted to $9.9 billion, a $2-billion increase from the year before. From that revenue, payments to the province amounted to $805 million, an increase of $114 million from the previous year. Those payments fund the budgets of the ministries of health, education, and environment among others.

MAB. C. calculates that the direct expenditures by the mining sector into the B.C. supply chain were $3 billion in 2011. When the indirect expenditures are also taken into account, the total of all of the economic activity that is connected to the B.C. mining sector in 2011 was in the order of $8.9 billion.

In addition to expenditures in the supply chain, 9,310 British Columbians were employed by the mining sector in 2011, up from 8,195 in 2010. Not only did employment increase but so did average earnings, up from $108,100 in 2010 to $115,700 in 2011.

In Vancouver, the investment by the mining sector has created a world-class centre of excellence with approximately 1,200 exploration companies operating from the city. Those companies commission all manner of supplies and services locally in order to operate successfully and have a significant, direct and indirect effect on the health of Vancouver’s economy.

Those companies are also, of course, dependent on the actual exploration activities that occur on the land base throughout B.C. In the northern part of the province, mining exploration expenditures have increased by an annual average of 26.4 per cent over the past five years and are up 67.8 per cent between 2011 and 2012 for a total expenditure of $557.8 million last year. In Prince George, employment in the mining sector has increased by an annual average of 31.5 per cent over the past five years.

Approximately 16 per cent of northern B.C.’s employment in the mining and oil and gas sector is located in Prince George, with a similar percentage for the number of businesses focused primarily on mining or support activities for mining operations. According to Statistics Canada, 1,100 Prince George residents and 6,800 people in northern B.C. were directly employed in mining and exploration during 2012.

There are nine operating mines, two mines under development, 16 proposed mines and 51 major exploration projects across the northern part of British Columbia. As the supply and service hub for business activities across the northern region, the mining sector plays a very important role in the strength and diversification of the Prince George economy.

The mining sector utilizes Prince George drilling, engineering, environmental, manufacturing, fabrication, transportation, and other supply companies. As an example, in 2012, Thompson Creek Metals, which is constructing the Mount Milligan mine located 155 km northwest of Prince George, spent $125 million dollars in the region with $61 million spent directly in Prince George. Mount Milligan represents only one of the two mines under development and the expenditures and employment that will continue to be created by the nine operating mines and those coming on stream over the next decade can easily be extrapolated. By extension, the continued health of the 1,200 exploration companies and the associated, direct and indirect suppliers located in Vancouver also depend on the continued strength of B.C.’s mining sector throughout the province.

The foundation of the British Columbia’s economy is its resource sectors. B.C.’s economy is dynamic and diverse and excels in the education, knowledge based, and creative sectors, offers tourism and hospitality products that are second to none and is competitive in manufacturing, construction and transportation.

However, B.C. depends on resource based industries, like mining, to underpin all of the other economic activities throughout the entire province — including those in Vancouver and Prince George.

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